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DELiA*s, Inc. Announces Third Quarter 2011 Results

Net loss for the first nine months of fiscal 2011 decreased to $18.5 million, or $0.59 per diluted share, compared to a net loss of $22.3 million, or $0.72 per diluted share, for the first nine months of fiscal 2010. Included in the first nine months of fiscal 2010 was the aforementioned goodwill impairment charge of $7.6 million, or $0.24 per diluted share. The net loss for the first nine months of fiscal 2011 includes a benefit for income taxes of $0.9 million, or $0.03 per diluted share, compared to a benefit of $6.0 million, or $0.19 per diluted share, recorded in the first nine months of fiscal 2010.

Conference Call and Webcast Information

A conference call to discuss third quarter 2011 results is scheduled for Tuesday, November 22, 2011 at 10:00 A.M. Eastern Time. The conference call will be webcast live at www.deliasinc.com. A replay of the call will be available until December 22, 2011 and can be accessed by dialing (888) 286-8010 and providing the pass code number 60550902.

During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.

About dELiA*s, Inc.

dELiA*s, Inc. is a direct marketing and retail company comprised of two lifestyle brands primarily targeting teenage girls and young women. Its brands – dELiA*s and Alloy – generate revenue by selling apparel, accessories, footwear and room furnishings to consumers through direct mail catalogs, websites, and dELiA*s mall-based specialty retail stores.

Forward-Looking Statements

This announcement may contain forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations and beliefs regarding our future results or performance. Because these statements apply to future events, they are subject to risks and uncertainties. When used in this announcement, the words “anticipate”, “believe”, “estimate”, “expect”, “expectation”, “should”, “would”, “project”, “plan”, “predict”, “intend” and similar expressions are intended to identify such forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements. Additionally, you should not consider past results to be an indication of our future performance. For a discussion of risk factors that may affect our results, see the “Risk Factors That May Affect Future Results” section of our filings with the Securities and Exchange Commission, including our annual report on Form 10-K and quarterly reports on Form 10-Q. We do not intend to update any of the forward-looking statements after the date of this announcement to conform these statements to actual results, to changes in management's expectations or otherwise, except as may be required by law.

   
dELiA*s, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share data)
(unaudited)
 
October 29, 2011 October 30, 2010
ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 15,778 $ 14,356
Inventories, net 41,655 41,838
Prepaid catalog costs 3,654 3,934
Restricted cash - 7,285
Deferred income taxes - 1,138
Other current assets   3,696     12,393  
 
TOTAL CURRENT ASSETS 64,783 80,944
 
PROPERTY AND EQUIPMENT, NET 44,843 52,444
GOODWILL 4,462 4,462
INTANGIBLE ASSETS, NET 2,419 2,419
OTHER ASSETS   852     139  
TOTAL ASSETS $ 117,359   $ 140,408  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable $ 21,742 $ 22,559
Accrued expenses and other current liabilities 16,653 21,257
Income taxes payable   891     825  
TOTAL CURRENT LIABILITIES 39,286 44,641
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES     11,964     11,633  
TOTAL LIABILITIES   51,250     56,274  
 
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Preferred Stock, $.001 par value; 25,000,000 shares authorized,
none issued - -
Common Stock, $.001 par value; 100,000,000 shares
authorized; 31,432,531 and 31,312,591 shares issued
and outstanding, respectively 31 31
Additional paid-in capital 99,081 99,292
Accumulated deficit   (33,003 )   (15,189 )
TOTAL STOCKHOLDERS' EQUITY   66,109     84,134  
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 117,359   $ 140,408  
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
       
For the Thirteen Weeks Ended
October 29, 2011 October 30, 2010
 
 
NET REVENUES $ 58,067 100.0 % $ 60,610 100.0 %
 
Cost of goods sold   39,336   67.7 %   39,838   65.7 %
 
GROSS PROFIT   18,731   32.3 %   20,772   34.3 %
Selling, general and administrative expenses 23,081 39.7 % 24,450 40.3 %
Impairment of goodwill - 0.0 % 7,611 12.6 %
Other operating income   (122 ) -0.2 %   (63 ) -0.1 %
TOTAL OPERATING EXPENSES   22,959   39.5 %   31,998   52.8 %
OPERATING LOSS (4,228 ) -7.3 % (11,226 ) -18.5 %
Interest expense, net   (171 ) -0.3 %   (91 ) -0.2 %
LOSS BEFORE INCOME TAXES (4,399 ) -7.6 % (11,317 ) -18.7 %
Provision (benefit) for income taxes   26   0.0 %   (1,655 ) -2.7 %
NET LOSS $ (4,425 ) -7.6 % $ (9,662 ) -15.9 %
 
BASIC AND DILUTED LOSS PER SHARE:
 
NET LOSS PER SHARE $ (0.14 ) $ (0.31 )
 

WEIGHTED AVERAGE BASIC AND DILUTEDCOMMON SHARES OUTSTANDING

  31,209,737     31,105,983  
       
dELiA*s, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
 
For the Thirty-Nine Weeks Ended
October 29, 2011 October 30, 2010
 
 
NET REVENUES $ 151,560 100.0 % $ 153,784 100.0 %
 
Cost of goods sold   104,381   68.9 %   104,976   68.3 %
 
GROSS PROFIT   47,179   31.1 %   48,808   31.7 %
 
Selling, general and administrative expenses 66,406 43.8 % 69,587 45.2 %
Impairment of long-lived assets - 0.0 % 7,611 4.9 %
Other operating income   (194 ) -0.1 %   (301 ) -0.2 %
TOTAL OPERATING EXPENSES   66,212   43.7 %   76,897   50.0 %
OPERATING LOSS (19,033 ) -12.6 % (28,089 ) -18.3 %
Interest expense, net   (394 ) -0.3 %   (261 ) -0.2 %
LOSS BEFORE INCOME TAXES (19,427 ) -12.8 % (28,350 ) -18.4 %
Benefit for income taxes   (921 ) -0.6 %   (6,015 ) -3.9 %
 
NET LOSS $ (18,506 ) -12.2 % $ (22,335 ) -14.5 %
 
BASIC AND DILUTED LOSS PER SHARE:
NET LOSS PER SHARE $ (0.59 ) $ (0.72 )
 
WEIGHTED AVERAGE BASIC AND DILUTED COMMON SHARES
OUTSTANDING   31,209,737     31,103,574  
   
dELiA*s Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
For the Thirty-Nine Weeks Ended
October 29, 2011 October 30, 2010
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (18,506 ) $ (22,335 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 8,624 7,835
Stock-based compensation 571 651
Impairment of goodwill - 7,611
Changes in operating assets and liabilities:
Inventories (9,630 ) (8,136 )
Prepaid catalog costs and other assets 6,265 (935 )
Restricted cash 8,268

 

255
Income taxes payable 149 92
Accounts payable, accrued expenses and other liabilities   (4,973 )   (6,674 )
 
Total adjustments   9,274     699  
NET CASH USED IN OPERATING ACTIVITIES   (9,232 )   (21,636 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures   (3,064 )   (5,659 )
NET CASH USED IN INVESTING ACTIVITIES   (3,064 )   (5,659 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of employee stock options   -  

 

  5  
NET CASH PROVIDED BY FINANCING ACTIVITIES   -     5  
 
NET DECREASE IN CASH AND CASH EQUIVALENTS (12,296 ) (27,290 )
CASH AND CASH EQUIVALENTS, beginning of period   28,074     41,646  
CASH AND CASH EQUIVALENTS, end of period $ 15,778   $ 14,356  
       
dELiA*s, Inc.
SELECTED OPERATING DATA
(in thousands, except number of stores)
(unaudited)
 
For The Thirteen Weeks Ended For The Thirty-Nine Weeks Ended
October 29, 2011 October 30, 2010 October 29, 2011 October 30, 2010
 

Channel net revenues:

Retail $ 36,186 $ 37,203 $ 89,589 $ 87,538
Direct     21,881     23,407       61,971     66,246  
Total net revenues   $ 58,067   $ 60,610     $ 151,560   $ 153,784  
 
Comparable store sales     (1.7 %)   (0.4 %)     1.6 %   (4.8 %)
 
Catalogs mailed     9,356     11,488       25,940     29,150  
 
Inventory - retail   $ 24,501   $ 23,595     $ 24,501   $ 23,595  
Inventory - direct   $ 17,154   $ 18,243     $ 17,154   $ 18,243  
 
 

Number of stores:

Beginning of period 115 115 114 109
Opened 1 * - 3 * 9 **
Closed     2   *   -       3   *   3   **
End of period     114     115       114     115  
 
Total gross sq. ft @ end
of period   437.2     440.4       437.2     440.4  
 
* Totals include one store that was closed, remodeled and reopened in the second quarter of fiscal 2011, and one store that was closed, remodeled and reopened in the third quarter of fiscal 2011.
 
** Totals include one store that was closed, remodeled and reopened in the second quarter of fiscal 2010, and one store that was closed and relocated to an alternative site in the same mall during the second quarter of fiscal 2010.




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